Washington, 15 August (Argus) — Central Appalachia coal production plummeted 20pc on the year in the second quarter on softening metallurgical coal markets and lackluster thermal demand.
Basin production totaled 38mn short tons (34mn metric tonnes) in the quarter, down from 48mn st in the same period a year ago, according to Mine Safety and Health Administration (MSHA) data.
Producers were responding to slower domestic and international demand. In the US, utilities grappled with high inventories, low natural gas prices and a mild winter, all of which decreased coal burns. Softer metallurgical coal interest from Asia weighed on coking coal output, despite expectations that total US exports will reach a record 120mn st this year on higher thermal exports to Europe.
In response to lower demand, producers have idled mines and cut workers' hours and overtime.
Central Appalachian production in the first half of 2012 totaled 80mn st, down 16pc from 95mn st for the same period a year ago.
Output among the basin's top 10 producing mines fell 9pc to 7.3mn st, from 8mn st in the prior-year period.
Consol Energy's Buchanan No. 1 mine in Virginia was again the top-producing mine for the basin, at 1.1mn st in the second quarter, although production was down from 1.4mn st a year ago. Consol idled the longwall there from 9 March until 1 May so the company could better match supply with demand. Consol also idled the longwall for a week in late July. The company expects those steps to cut Buchanan's third-quarter production by 100,000st.
Arch Coal's Coal Mac Holden No. 22 surface mine in Logan County, West Virginia, was the second-biggest producer in Central Appalachian during the second quarter, with output at 862,735st compared with 819,111st last year.
Rounding the top three was Alpha Natural Resources' Black Castle Mining in Boone County, West Virginia. Black Castle produced 715,225st of coal in the second, down from 738,159st a year ago.
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